Threshold increase for capital good scheme items

The government has confirmed that it intends to legislate to increase the threshold for capital good scheme items from £250,000 to £600,000.

The scheme requires taxpayers to monitor the use of capital items (generally comprising acquisition, construction and renovation of property) and adjust the amount of VAT initially recovered to reflect taxable versus exempt use over a 10 year period.

Although no date has yet been given, HMRC has confirmed the change would apply to new capital good scheme items; existing items will remain in the scheme for the full 10 years, even if they cost less than the threshold when it is uprated.

Who to speak to

Matthias Barker, Finance Policy Leader

020 4558 6188

matthias.barker@housing.org.uk